Hi,
I am working in a proprietorship as accountant. We are into the sale of sports bike. We are collecting service charges on labour for vehicle servicing as well as we are receiving insurance commission as well as finance commission. When I make service bills I used to charge the customer 12.36% service tax on labour. Please let me know the following
- If I have to receive Rs.5000 as insurance commission in a particular month obviously the journal entry will be the following
Insurance Receivable Dr ( Under current asset) 5000
Insurance payout Cr. (Under Indirect Income) 5000
I am supposed to pay Rs.618 as service tax on the commission received of Rs.5000. Now if I pass the following journal is it correct or not
Insurance Receivable Dr ( Under current asset) 5000
Insurance payout Cr. (Under Indirect Income) 4382
Service Tax @ 10 @ 500
Education Cess @ 2% 100
Sec.Education cess @ 1% 18
- We are availing the service of a security for our showroom from a n agency. Now when they give us their invoice they are charging us service tax. When we book that expense the service tax charged by them can be treated as input service tax and the difference between output and input service tax has to be paid.
CAclubindia
